Is your business structure still the right fit?

Many business owners don’t realise that the business has outgrown its structure until something comes up – and this something is usually something negative.business structure advice

Are your assets at risk?

Legal action by employees, customers and suppliers as well as divorce are the
two primary risk issues for many business operators. If you have been operating as a sole trade or as a partner in a partnership or have simply been holding all business assets in a single entity, your structure may not provide sufficient asset protection.

If any personal assets or valuable assets of the business are held in the same entity which carries on the trading operations of the business, those assets may be at risk. To protect your assets it is generally preferable to separate as many valuable assets as possible from the trading operations.

Making the change

Changing your business structure is not something you necessarily want to do with regularity. The benefits and costs need to be weighed-up to ensure that the decision is the right one for the long term. While tax will always be a significant consideration, current Capital Gains Tax (CGT) concessions can provide significant relief.In addition, the announcement in the May 2015 Federal Budget of further concessions for the restructure of small businesses (turnover under $2m) should help reduce the tax cost of restructuring a business. This measure takes effect from 1st July 2016.

In addition, the announcement in the May 2015 Federal Budget of further concessions for the restructure of small businesses (turnover under $2m) should help reduce the tax cost of restructuring a business. This measure takes effect from 1st July 2016.

If you think you have, or your about to outgrow your business structure, or would like further business advice, please contact us for a friendly chat.

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